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The celebration surrounding the launch of Apple’s new iPhone mobile handset was cut short on Wednesday after Cisco Systems, which owns the rights to the iPhone name, said it would sue Apple for trademark infringement.

In a statement issued after the close of trading on Wednesday, the world’s biggest maker of data networking equipment said it would seek an injunction to prevent Apple from brandishing the mark.

“Cisco entered into negotiations with Apple in good faith after Apple repeatedly asked permission to use Cisco’s iPhone name,” said Mark Chandler, senior vice president and general counsel, Cisco. “There is no doubt that Apple’s new phone is very exciting, but they should not be using our trademark without our permission.”

Cisco, which acquired the iPhone trademark through an acquisition in 2000, said as recently as Tuesday that it had been in discussions and expected to reach a final agreement with Apple about the use of the iPhone name.

“Cisco’s trademark lawsuit is silly,” an Apple spokesman told the Financial Times. “There are already several companies using the name iPhone for VoIP. We are the first company to ever use the iPhone name for a cell phone and if Cisco wants to challenge us we’re confident we will prevail.”

Last month Cisco’s Linksys wireless networking division began shipping its own iPhone cordless handsets. The phones allow customers to make telephone calls both over the internet and over a standard fixed line connection.

The Cisco lawsuit marks the latest in a series of intellectual property troubles for Apple.

Last year, the maker of Macintosh computers and iPod personal music players agreed to pay $100m to settle a long-running patent dispute with Creative, a Singapore-based music player rival.

Apple also fought off a lawsuit by Apple Corps, the Beatles’ record label, which last year sought to stop Apple from using the Apple name in connection with its online music service. The company’s iTunes music software also faced challenges from governments in Europe last year, most notably in France.

Apple’s shares fell 0.7 per cent in after hours trading following news of the suit. They had climbed 4.5 per cent during regular trading, adding to a gain of more than 8 per cent on Tuesday after Steve Jobs, chief executive, unveiled Apple’s iPhone at the company’s annual MacWorld trade show in San Francisco.

Mr Jobs said on Tuesday that the company expects to ship the first of its iPhones to US customers in June.